Commercial Franchise Zones Explained

Lately, the topic of commercial waste collection zones—specific areas of municipalities that are assigned to contractors for collection services—has gained traction both inside and outside the industry. And while there are both pros and cons to franchise zoning systems, the industry is split when it comes to supporting the concept.

Proponents claim that franchise zoning systems give the public sector more control over the waste management collection process, while critics state that removing the industry’s longtime open-market system takes away businesses’ ability to choose their own haulers, ultimately leading to higher costs and poor collection services for customers.

Two of the industry’s largest playing fields, New York City and Los Angeles, are exploring the concept of commercial franchise zoning systems. Los Angeles is implementing its new zoning system this July, and after submitting a recent request for proposal (RFP), New York is currently moving forward with developing a franchise zoning system plan proposal that is slated to be ready for review in February.

What are franchise zones?

With a franchise zone collection system, municipalities establish zones (or assigned areas) and then create exclusive contracts with a hauler within each zone. The haulers are typically selected through a bidding process, where haulers provide the municipalities with collection services details and options.

If long-term contracts are established between municipalities and haulers, the haulers have the incentive to make the necessary infrastructure investments that are needed to achieve high diversion rates. Additionally, municipalities can require haulers to utilize more clean-fuel trucks for collection services, ultimately reducing common road wear and traffic with more effective and efficient collection routes.